Why Can't Industry Design an Affordable Hearing Aid? 549
Hugh Pickens writes "Tricia Romano writes in the NY Times that over the last 10 years, purchasing a hearing aid had become even more difficult and confusing than buying a new car — and almost as expensive. 'I visited Hearx, the national chain where I had bought my previous aids. There, a fastidious young man spread out a brochure for my preferred brand, Siemens, and showed me three models. The cheapest, a Siemens Motion 300, started at $1,600. The top-of-the-line model was more than $2,000 — for one ear. I gasped.' A hearing aid is basically just a microphone and amplifier in your ear so it isn't clear why it costs thousands of dollars while other electronic equipment like cellphones, computers and televisions have gotten cheaper. Russ Apfel, an engineer who designed a technology now found in all hearing aids, says there is no good reason for the high prices. 'The hearing aid industry uses every new thing, like digital or a new algorithm, to raise prices,' says Apfel. 'The semiconductor industry traditionally reduces the cost of products by 10 to 15 percent a year,' he said, but 'hearing aids go up 8 percent a year annually' and have for the last 20 years."
clones? (Score:5, Informative)
http://science.slashdot.org/story/11/09/09/2346233/is-there-a-hearing-aid-price-bubble [slashdot.org]
http://ask.slashdot.org/story/10/03/13/1916203/why-are-digital-hearing-aids-so-expensive [slashdot.org]
has a slashdot staff a sensitivity towards the issue or something ?
From last time... (Score:2, Informative)
Try looking at this here . . . (Score:5, Informative)
http://ask.slashdot.org/story/12/06/13/1828232/ask-slashdot-why-are-hearing-aids-so-expensive [slashdot.org]
Re:three words, one hyphen: (Score:5, Informative)
http://www.nhs.uk/chq/Pages/894.aspx?CategoryID=68&SubCategoryID=157 [www.nhs.uk]
NHS hearing aids and new batteries are free. If you lose your hearing aid or damage it, you may be asked to pay towards the cost of repairing or replacing it.
Re:three words, one hyphen: (Score:5, Informative)
How many people who need them now don't get them because they can't afford $2k+ when they should be paying maybe $250?
I know that's the case for at least two of my relatives.
Re:three words, one hyphen: (Score:5, Informative)
One large player, Phonak, reported in 2004: "The gross margin reached 59.5% which is almost 500 basis points over the gross margin of 54.8% reported in the same period last year." They've improved that to 66% in 2011.
Certainly the free market isn't driving down the price...
Re:three words, one hyphen: (Score:2, Informative)
Re:three words, one hyphen: (Score:5, Informative)
Right now, the government gives tax incentives for an employee to get health insurance from their employer. So if my regular income is taxed at, say, 25%, I could either receive $10,000 worth of health care benefits from my employer tax free, or cash, which would mean I would only receive $7,500. So I'd be a fool to not get my health insurance through my employer. So the employee has a government created incentive to favor getting insurance over money. And the more medical prices rise, the "better" it is for me to choose to get the health insurance.
With a huge amount of people incentivized to get this health insurance, and use it as the way to pay for every single medical treatment they receive, and not just insurance against catastrophic accidents (a certain amount of coverage will be mandated under the Affordable Care Act) the more people completely disregard the cost of the care they receive. Do you ever see a list of services and prices posted at a hospital? They're not paying for it, so what do they care what anything costs? If they don't pay (beyond maybe a deductible) why is it worth it for them to price shop? Insurance companies can attempt to do this to a degree by restricting where people can get care or choose not to cover certain things. But these choices are being legislated away as well, and force insurance companies to cover certain things free of charge, hugely distorting the market even more.
Imagine if we bought food like we bought health care. Instead of getting cash, we'd have a government incentive to instead receive an all-you-can-eat grocery card from our employers. We'd walk into a grocery store, and there would be no prices posted, because the shoppers wouldn't care because they aren't paying anyway. Naturally prices would skyrocket as consumers no longer consider price. The government then would come in, point out the skyrocketing price of food, declare a "food crisis," and take over the whole industry. Having caused the problems in the first place.
Look at areas of medical treatment in which the government is not involved. Sadly there are very few of those, but take for example Lasik surgery. Prices for that drop every single year. Why? Because of natural market pressures. People usually pay for that out of pocket, so they naturally price- and quality shop. Lasik establishments are incented to reduce costs and improve quality. And they do.
The problem is not that it's "for profit." The computer industry is hugely profit-driven, and advances in manufacturing and assembly efficiencies drive down costs a huge amount. McDonald's prices don't skyrocket because they're for-profit. The reason problems get solved and consumers get what they want is because people can make profits providing what they want at a price they want, without government intervention. But parent is right. The problem isn't "greedy capitalism." The problem is that we have gotten so far from real capitalism, though we still think that's what we've got, and whenever something like this happens, someone points out capitalism and greed as the problem and insert even more damaging bureaucracy.
Re:three words, one hyphen: (Score:5, Informative)
If you don't mind a behind the ear design, there's plenty of hearing aid work-alikes out there. Hearing aids are FDA medical devices that must be custom fitted and adjusted for the individual by order of a licensed professional, but if you look in the back of the AARP, or the American Legion magazines you'll find consumer devices that look a lot like hearing aids, work like hearing aids, but aren't.
Cheaper hearing aids were sold for awhile... (Score:2, Informative)
It was about ten years ago when Sharper Image actually sold disposable hearing aids for a very reasonable price. What happened? The legal sale of hearing aids without a doctor's prescription was basically legislated out of existence. How dare someone sell $40 hearing aids to the general public! My ninety (at the time) year old grandfather loved them. I couldn't buy them in my state so had to drive to a neighboring state where they allowed the sale. Until they didn't any more. Can anyone say racket?
Re:three words, one hyphen: (Score:5, Informative)
When you have products that are highly desirable (and if you're hearing-impaired, a hearing aid is highly desirable) then prices will stay as high as people are willing to pay.
Unless a reliable competitor emerges with a similar product and is willing to make profits off of selling volume rather than hiking the price exponentially.
I frankly don't know what is possible for hearing aids, but I do know, for example, that a medication a friend needed to buy supposedly cost $170 at retail for a 90-day supply, and he was asked to pay $45 for a copay for that medication by his insurance. One day when he moved, he decided to transfer pharmacies and went to a local grocery store with a pharmacy. He didn't have insurance at the time, so he expected to have to shell out a lot of money. But, only with the free savings card from the grocery store, he got the 90-day supply for $10, less than 1/4 of his copay with a premium insurance plan! This was for the same generic drug in both cases -- but in the first case an insurance company, a drug manufacturer, and a pharmacy were obviously in collusion, while in the grocery store, the pharmacy had an incentive to sell cheap drugs to uninsured people, so it made a deal with the manufacturer. The grocery store pharmacist didn't even ask for insurance information, because he knew he could give a price better than any copay required on a normal insurance plan.
This is for a "highly desirable" product (in this case, blood pressure medication).
For another example outside of medicine, there was a regional grocery store chain where I used to live whose prices were consistently about 40% off of all major competing grocery stores in the area. I'm not talking about generic items: I'm talking an average of 40% off for the same name brand grocery items. They had only one store in the metropolitan area where I lived, but the aisles were packed almost from 7am-9pm. It wasn't convenient to public transport, but I saw poorer folks taking cabs to get there all the time, because they saved so much, it more than paid for the cab.
You can't get more "highly desirable" than basic food. The other supermarkets in the area counted on the fact that they were more convenient to public transport or that people just wouldn't bother to look at the other store or that people would assume it was the place "poor people shopped." Quite a few people who never shopped there told me that they heard it was "dirty." Yet the opposite was the case -- produce and meat flew off the shelves and was much fresher than any other supermarket in the area. I never saw evidence of dirt or vermin there, but I heard a couple different friends report that they saw mice at one of the "premium" supermarkets near there, and one who reported the mice saw that the food which had been eaten into was not removed from the shelves when she was back there a couple days later. After all, the "premium" supermarkets were always like ghost towns, except for a few hours right after standard work hours, so most people wouldn't even notice.
Basically, if there is a market where people will shop around, some businesses may take advantage of that market by providing a cheaper product. If few consumers actually have a real transaction to buy a product and instead go through an intermediary like an insurance company, there is little incentive for anyone to provide lower prices. In fact, if there is a situation such as in the current national health care bill where insurance companies will be limited to 15% of billed costs toward "administrative fees" (i.e., where the profits come from), there is actually an incentive for insurance companies to drive costs UP, since that's the only way they can skim more money off the top.
Re:three words, one hyphen: (Score:4, Informative)
I noticed name brand heavy cream varies from $2 to $4 as the lowest price at two different chains.
Thanks for the $10 generic tip.
Also, you can buy hearing aids with 2002 technology on hunting sites.
Part of the reason that official "hearing aids" are expensive is that they are a medical device.
The same exact device not classified as a medical device is 1/10th the price.